5 ms·

My neighbor owns and runs a McDonald's franchise and that man is drowning in debt and working himself to death. I honestly would not recommend it.

johnwheeler 10y ago
I don't know your neighbors case, but there are plenty of wealthy McDonalds franchise owners. I got this off Google just now (from McDonalds) An average McDonald's franchise makes between $500,000 and $1 million in profits per year as of 2013, according to McDonald's Franchise Disclosure Document. For restaurants open at least 1 year in the United States, average total revenues are $2.6 million.
- kagamine 10y ago
  Neighbor does not live in the US but in a country with strict employment law and higher operating costs. I don't know the details of how a McDonalds franchise works, I have only eaten in one twice in >40 years alive, the last time being 25 years ago, but I imagine a fairly large chunk of those profits go to the MCD HQ, some go toward paying off the loan required to buy into the franchise which is personal debt not McDs debt, and by the looks of my neighbor some goes toward the staff eating the stock. I have no doubt fast food places make money, they are everywhere, but the hours are terrible and the lifestyle sucks.
- greedo 10y ago
  Sorry, it took me a moment to stop laughing. Revenue is not profit for starters, and "profit" can be defined in so many ways. A more accurate representation for a franchisee is "total operating income" which is usually between 5-10% of net sales. This is what the owner/operator takes home before taxes. With net sales averaging $2.7m, that take home is usually around $150K. Definitely not peanuts, but considering the cost of a franchise and the amount of work involved, not living high on the hog.
  - johnwheeler 10y ago
    The statement off the McDonalds website doesn't imply revenue = profit. There are a variety of net margins that differ by industry, and I wouldn't be surprised if the net income (what you call "take home pay") would be $150K. The franchising royalties would be deducted before that net income. $150,000K * 5 is enough to live "high on the hog", especially since you wouldn't have to save it given you own 5 McDonalds you could sell, probably for a large profit down the line too.
    - greedo 10y ago
      Sure if you magically own five franchises; in that case you've already invested at least $5m, if not double that. I can't find the link you're referencing, since the first return on Google isn't linked to McDonalds directly, but McDonalds franchisees and managers refer to one measure of "profit" as profits after controllables (PAC). This is nothing like net operating income.
      - johnwheeler 10y ago
        > Sure if you magically own five franchises Please refer to the parent thread, where we're talking about what you'd do with $5M. You really should read the conversation and get background on it before you jump onboard and try making others look stupid. You make yourself look dumb, or a troll, or both.
        greedo 10y ago
        You stated completely incorrect info on the average profit of a US based McDonalds. Sorry to point that out to you.

johnwheeler 10y ago

I don't know your neighbors case, but there are plenty of wealthy McDonalds franchise owners. I got this off Google just now (from McDonalds) An average McDonald's franchise makes between $500,000 and $1 million in profits per year as of 2013, according to McDonald's Franchise Disclosure Document. For restaurants open at least 1 year in the United States, average total revenues are $2.6 million.

kagamine 10y ago
Neighbor does not live in the US but in a country with strict employment law and higher operating costs. I don't know the details of how a McDonalds franchise works, I have only eaten in one twice in >40 years alive, the last time being 25 years ago, but I imagine a fairly large chunk of those profits go to the MCD HQ, some go toward paying off the loan required to buy into the franchise which is personal debt not McDs debt, and by the looks of my neighbor some goes toward the staff eating the stock. I have no doubt fast food places make money, they are everywhere, but the hours are terrible and the lifestyle sucks.
greedo 10y ago
Sorry, it took me a moment to stop laughing. Revenue is not profit for starters, and "profit" can be defined in so many ways. A more accurate representation for a franchisee is "total operating income" which is usually between 5-10% of net sales. This is what the owner/operator takes home before taxes. With net sales averaging $2.7m, that take home is usually around $150K. Definitely not peanuts, but considering the cost of a franchise and the amount of work involved, not living high on the hog.
- johnwheeler 10y ago
  The statement off the McDonalds website doesn't imply revenue = profit. There are a variety of net margins that differ by industry, and I wouldn't be surprised if the net income (what you call "take home pay") would be $150K. The franchising royalties would be deducted before that net income. $150,000K * 5 is enough to live "high on the hog", especially since you wouldn't have to save it given you own 5 McDonalds you could sell, probably for a large profit down the line too.
  - greedo 10y ago
    Sure if you magically own five franchises; in that case you've already invested at least $5m, if not double that. I can't find the link you're referencing, since the first return on Google isn't linked to McDonalds directly, but McDonalds franchisees and managers refer to one measure of "profit" as profits after controllables (PAC). This is nothing like net operating income.
    - johnwheeler 10y ago
      > Sure if you magically own five franchises Please refer to the parent thread, where we're talking about what you'd do with $5M. You really should read the conversation and get background on it before you jump onboard and try making others look stupid. You make yourself look dumb, or a troll, or both.
      - greedo 10y ago
        You stated completely incorrect info on the average profit of a US based McDonalds. Sorry to point that out to you.